RBI's Financial Stability Report projects Indian banks' bad loans to rise slightly to 1.9% by March 2028 under a baseline scenario, from 1.8% in March 2026. Capital ratios are expected to moderate, but remain above regulatory norms even under adverse scenarios, with no bank projected to breach the minimum CRAR requirement.
Indian banks' gross bad loans are projected to slightly increase to 1.9% by March 2028 from 1.8% in March 2026, according to the RBI's Financial Stability Report. Despite this, the banking system is expected to remain resilient with strong capital, healthy profits, and improving credit growth, capable of absorbing shocks.
RBI's latest report indicates India's economic growth could benefit from the Iran-US peace deal, despite risks from high commodity prices and global outlook. The central bank also noted potential fiscal deficit pressure from energy costs and subsidies, while measures for MSMEs and exports aim to sustain activity.
RBI's latest Financial Stability Report identifies AI-enabled cyberattacks as India's top near-term financial system risk, with banks and NBFCs most concerned. Preparedness is uneven, despite increased investment, highlighting the need for stronger employee awareness and forensic capabilities.
Bloomberg Economics estimates the RBI sold $12 billion in gold in two weeks ending May 22 to protect foreign exchange reserves amid rising energy costs and currency pressure due to the US-Iran conflict.
